Failure of IMF and World Bank Policies in Sub-Saharan Africa

Africa had been the target of colonialism and slavery for many years. The colonies that European’s developed during fifteenth and sixteenth century were the main reason that started slave trade in Africa.

This failure was harshly criticized by some economists as a failure of the "one size fits all" Washington Consensus approach (Stiglitz, 2008). Also, IMF itself admitted some responsibility and mistakes in worsening Argentina crisis (Conway, 2004). Anyway, while IMF never considered the Washington Consensus approach as the root of the problems in Argentina, and explained its faults as being a matter of growth forecast errors (Blanchard & Leigh, 2013), most of the widely agreed criticisms to IMF targeted exactly the Washington Consensus approach and the mindset behind it: "Government as the problem, and markets as the solution" (Stiglitz, 2008, n.d.). In practice, IMF is sometimes perceived as an institution much more involved in liberalization and privatization than in solving economic crisis, and this perception fuels hostile feelings among the population of assisted countries suffering for structural reforms. So, though it is still not proven that the Washington Consensus policies are definitely wrong, it is clear enough that IMF should revise its approach and mindset and should take more care of the social outcome of the economic policies it requests, if it wants to stop being blamed for social riots. A simple way to achieve this goal could be the sharing of risks and responsibilities for erroneous policies that IMF dictates. The righteousness of policies could be judged in respect to the spread between real growth

Africa was once a thriving and wonderful continent filled with luxurious and wealthy kingdoms, but that had all changed when a new and appalling type of slavery was introduced. Around the 18th century, Africa became an ideal place for Europeans to trade and buy slaves from. The slave trade in Africa seemed to be manageable and somewhat peaceful before the Europeans brought in a new type of slavery. When the Europeans bought slaves from Africans, they kept them as slaves for life which were very different from how long slaves were kept in Africa. Europeans kept slaves in extremely poor conditions and treated them as if they were less than human. These actions caused a great spike in the slave trade all over the world and many

In the second half of the twentieth-century, African countries were able to gain their independence and strive to create unified countries. However, many countries were plagued with civil wars and the issues left behind the colonial era. The adversities faced by these new African nations are at the hands of their old colonial powers and the neo-colonialism that has taken place. These new independent countries were left to unify their people of different backgrounds, create a strong government and economy, and leave the post-colonial legacy behind.

The large cash injection would then create a “greasing the gears effect” and allow for the jumpstart of economic development. Between the years of 1948 and 1952 the U.S. granted $13 billion to revamp the European economy (Dambisa, 2009: 35). This particular method achieved great success in post-World War II Europe and was known as the Marshall Plan. Due to its effective and unquestionable success in this era, the model was applied to economic development in Africa with the confidence that the same outstanding results would ensue. However, the application of the Marshall Plan to Africa is problematic for three reasons. One, the Marshall Plan had a rigid duration period of five years while, the concessional loans and grants to Africa over the last 50 years have been unending (Dambisa, 2009: 36). Two, European institutions were already in place to receive the aid efficiently and effectively. In Africa, however, these same institutions are either non-existent or grossly ineffective due to corruption (Dambisa, 2009: 37). The vast amounts of corruption have been heavily documented. Mobutu Sese Seko, President of the Democratic Republic of the Congo from 1965 to 1997, for example, stole an equivalent of U.S. 5 billion dollars from his people (Dambisa, 2009: 48). However, even the less corrupt rulers of many African countries had few options as to what to invest the aid money on. Consequently, the bulk concessional aid goes directly into consumption without a variety of investment outlets. This process does not solve the problem but instead, allows for the cycle to continue. Lastly, three, the money from the Marshal had specific targets to repair physical infrastructure such as, roads, communications, sewage, factories, and electric systems (Dambisa, 2009: 37) In Africa today, the scope of the

overcome barriers and fully take part in the globalised economy. In much of Africa however this was held up

The International Monetary Fund (IMF) was created in the mid-1940s as a direct result of the chaos created by the individual central banks before and during the Great Depression. With the advent of economic globalization, it became clear that the uncoordinated policies of individual central banks was becoming a hindrance to global growth and financial stability. In December 1944, the IMF formally came into existence with 29 members, each agreeing to cooperate on the international stage to stabilize exchange rates and

Firstly, the corruption and mismanagement of its leaders. Corruption is probably the most understandable reason for lack of development in this region. Take Zimbabwe for example, Zimbabwe is considered one of the most corrupt nations in the world, ranking 163rd out of 176 countries on the latest Transparency International

The IMF is a success in bailing out bondholding banks. The IMF exists to help people, all right—just not the people it claims to be helping, who are poor people in poor countries. It is helping rich people in rich countries get richer on the interest charged on loans on projects which should never have been undertaken.

Next up is Michael, the CEO of a longstanding private bank based in New York City: As Ruth pointed out, the book brings strings together different fields that worked to keep Africa in its current state. As awful as it is, there is a fault in the way the authors painted the process. All creditors are painted in a negative light. Boyce and Ndikumana call out the financial industry for doing its job. As a private banker, I have a duty to fulfill certain quotas for the company and our performance is judged accordingly. we have got clients that depend on us to invest their money and keep the cycle going. The way the loan is dealt with is not the responsibility of the banks. There are other groups such as the world bank that can formulate a

The International Monetary Fund is an organization created in 1945 consisting of 187 member-countries with goals to foster a global cooperative monetary system, promote international trade growth and exchange rate stability, and maintain a multilateral system of payments. The IMF attempts to achieve these goals by surveilling the global economy, providing financial assistance through credits and loans, and by providing technical assistance. The organization has been surrounded in controversies due to their severe policies that nations are required to follow in order to receive loans, assistance, and debt relief. With this influence on debtor nation’s economies, the IMF controls how much is spent on environmental protection, healthcare, and education. These strict policies undermine political institutions and have had a negative impact on many nations, including Argentina.

The Bretton Woods Conference in 1944 spawned two IFIs, the International Monetary Fund (IMF) and the World Bank, in order to rebuild a

If the economy of Africa falls, the rate of growth will be very minimal. The drop in the economy means that there will be less money generated within the internal income sources. This means that the countries cannot get enough cash to make major developments such us infrastructure, education, health and so on. The countries will have to turn back excessive borrowing from the developed countries (Yansané, 1996).

1.The international financial institutions (IFIs) are central pillars and the architects of the global economy. The world bank and IMF were founded and funded by the United states after the second world war to build shattered world economy after the war and great depression of the 1930s (socialist alternative,). The creation of the IFIs was to bring about a global economy after the “isolation economy” which some argue brought about the Second World War. The IFIs were to help the economy of the less developing countries (LDCs) to bring about growth and development, a phenomenon known as globalization.

In the year of 1327, Kind Edward III of England defaulted on his Italian debts. This caused the banks of Bardi and Peruzzi in Florence to collapse. Who would know that over 650 years later, the world would still have these types of problems? After World War II, the need for an organization like the IMF was finally realized. After the war, politicians and economists began to work on blue prints for a postwar world. They envisioned a liberal international economic order, based on stable world currencies and revived world trade. The International Monetary Fund (IMF) finally came into existence on December 27, 1945. On this date, twenty-nine